According to a report published by Fortune Magazine, Plainfield Asset Management (PAM) is the subject of a FBI investigation concerning allegations of fraud:
The Federal Bureau of Investigation is probing whether Plainfield Asset Management, a hedge fund that once had $5 billion in assets under management, committed fraud by overstating the value of some of its investments and charging management fees based on those inflated assets.
The firm was profiled by the magazine in January in a piece entitled: “The Fall of a Hedge-Fund Wunderkind”
Payout Perspective:
MMAPayout.com has confirmed PAM’s status as Bellator’s majority shareholder. According to an SEC filing on February 26, 2010, Plainfield Direct, an investment fund managed by PAM, holds a 51.6% majority stake in Bellator Sports Worldwide LLC. The common stock position represents an investment of roughly $2.25M. As of the date of the filing, Plainfield also held nearly $2.92M in senior debt.
In 2009 Bellator CEO and Founder Bjorn Rebney told MMAPayout.com that Bellator had met all of its capital requirements with the backing of “hedge funds,” but declined to provide any specifics.
Chris Carey of ShareSleuth.com contributed to this report.
There has been a long history of sports franchises being owned by people who made their money the old fashioned way. They stole or swindled it. A sports franchise seems to be the ultimate accesory for people driven to do those kinds of things.
Some thing to keep in mind here is that the money is actually coming from one of the funds and not the manager of the hedge fund. No one in the US goes to jail for stealing millions. You go to jail for stealing minor amounts. The rich just pay fines. So what kind of relief do the investors get beyond suing the manager?
But my guess is that if the SEC or FBI manage to make a case stick then the SEC would some how allow the hedge fund to be wound down and the investors to be able to get their money out. But then again maybe they just hire a new manager for the fund.
The Bellator investment appears to be a minor part of the fund. Liquidating Bellator is unlikely to result in much money but it would stop the bleeding they must be experiencing. I certainly don’t see further investment by this fund in Bellator’s future. It will be interesting to see this play out.
Just looking at the bellator shows, they have to be losing 10 million dollars at least in 2010,and how about 2009, so someone (investors) are taking the hit!!!!
I also understand that a Plainfield Asset Management executive travels with Bellator or actually works for Bellator….very interesting.
I disagree – I think that Bellator is next in line to the UFC – they’re televised nationally and they offer an entertaining MMA product in comparison to the competition. There fighters are quite skilled and there staff outshines that of Strikeforce with what seems to be a more polished expertise. Overall they have to be 2nd in the states when it comes to MMA outfits!
>”Overall they have to be 2nd in the states when it comes to MMA outfits!”
By what measure?
Gate? They draw in the hundreds for some shows.
TV Viewership? They won’t put up the numbers which is telling in it’s self. But the fact that no one knows when they are on has got to be a real problem.
Fighters? Your kidding right?
i think youre trying to make less of bellator than they actually are jv
bellator has a great product. they have a great highlight reel from all the events theyve been putting on that any promoter should be jealous of. their production is well done, the commentators are knowledgeable and work together much better than what strikeforce is offering. if youre telling me youre not interested in seeing eddie alverez vs roger heurta tonight, then i’m second guessing your appreciation for mma as a whole.
It’s pretty obvious to me their live shows are Thursday nights on FSN (regional times vary due to local sports commitments.) If you miss them you can easily catch the replay.
Bellator isn’t trying to have ticket sales as the largest part of their revenue stream. They are trying to build a television following which I think they are slowly building.
Their production quality is excellent, and I love the venues they have cards in.
I am not sure of their financial standing, but their television standing in my opinion is much better than strikeForce as far as the eyes that can watch.